INRODUCTION

 ASDA is a British supermarket chain with over 600 stores across the UK. It is the
second-largest supermarket chain in the UK, after Tesco (Sodry, 2023).
 ASDA's strategy is to offer low prices and a wide range of products to its
customers.
 The company also focuses on customer service and convenience. ASDA has been
successful in implementing its strategy and has grown its market share in recent
years.
 Furthermore, ASDA has made efforts to adapt to changing consumer preferences
and market dynamics. It has expanded its online presence and introduced various
initiatives to enhance its e-commerce capabilities. The company offers online
grocery shopping with home delivery and click-and-collect services, catering to
the increasing demand for convenient and flexible shopping options
(Bhilwarawala, 2023).
 ASDA BUSINESS STRATEGY
ASDA's strategy is based on the following key principles:
 Low prices: ASDA offers low prices on a wide range of products.
This is a key factor in attracting customers and keeping them
coming back. ASDA achieves low prices by negotiating
favourable contracts with suppliers, by operating efficient
stores, and by keeping its overhead costs low.
 Wide range of products: ASDA offers a wide range of products,
including food, clothing, home wares, and electronics. This
gives customers a one-stop shop for all their needs. ASDA also
offers a range of private label products, which are often
cheaper than branded products.
 Customer service: ASDA is committed to providing excellent
customer service. This includes friendly and helpful staff, clean
and well-stocked stores, and a convenient shopping experience.
ASDA also offers a number of customer service initiatives, such
as its "ASDA Price Guarantee" and its "ASDA Baby Club".
 Convenience: ASDA offers a number of convenient shopping
options, such as home delivery, click-and-collect, and extended
opening hours. This makes it easy for customers to shop at
ASDA, even when they are busy.
(ASDA,2023)
Analysis of the External Environment of
ASDA
 External Environment of a company provides
with suitable details regarding which
outside factors are influencing the company
and in what way
 It is important to have external environment
of a company properly assessed and
beneficial insights extracted from the data
 So, that the data could be applied to better
the prospect of the company succeeding in
a competitive business market
 There are five influencing factors which
have a direct impact on ASDA as defined
under PESTEL Analysis
PESTEL Analysis

Political Factors
 Brexit has proposed some trade hinderance with EU

 Stable Political Monarchy with Charles III

 60 commercial rollovers are in place to continue trade practices with EU

 Parliamentary Democracy in place to establish fair economical policies that
promote business
 PESTLE Analysis of ASDA
Political • Brexit has proposed some trade hindrance
with EU

• Stable Political Monarchy with Charles III

Economical • UK is the fifth largest economy in the world

regarding exchange rates
• UK is the sixth largest economy regarding
purchasing power which is a plus for ASDA
given it is a bit luxurious grocery store as
compared to Tesco or Lidl

Social • At the moment in UK the youth

unemployment rate is at 12.3% (Powell,
Francis-Devine and Foley, 2020)
• 24% of population is under the margin of
poverty
Technological • UK enjoys world’s finest and largest
technological ecosystem
• Up till last year more than 30 significant
technology clusters have been witnessed in
UK
Legal • Consumer Protection Act 2015 is aimed strongly
at protecting the customer’s interests and
enforce quality of service from service
providers
• Corporate tax within the UK has been increased
from 19% all the way to 25%
Environmental • Government has issued a strong emphasis over
the reduction of Carbon emissions and
protecting the environment
• There is a policy in effect in UK according to
which the government must reduce carbon
emission by 100% till 2050 (Climate change
committee, 2008)
Porter’s Five Forces
Porter’s Forces Impact of the Forces
Threats from the new market entrants Medium
Because of the fact that the retail industry
within the UK is extremely strong as retail
industry was worth £495.71 billion in 2022.
(Statista, 2022)
Threats of Substitute Medium
Because it would be very hard to form an
operational structure as strong as ASDA
Power of Customers High
Because most of the products are extremely
affordable
Power of suppliers Low
Because of the high volume of the retailing
industry
Industry Rivalry High
Other competitors such as TESCO, Sainsbury and
Morrison’s offer a decent competition
Distinctive Resources and Competencies

Asda's focus is on value, aiming to beat out its competitors

with prices that are known to be lower. Like its parent
company, ASDA commits itself to adopt everyday low prices
(EDLP) strategy as opposed to adopting the traditional high-
low price mechanism that is adopted in various other stores in
the grocery market.
 Resources

Tangible Intangible

That must be

Heterogeneous Immobile

Have a VRIO Attributes to become

VRIO Resources

That Provide

Competencies
VRIO analysis
Resource Valuable Rare Inimitable Organized Advantage
Tangible Y N N Y Competitive Parity

Brand Reputation Y Y Y Y Competitive Advantage

Intellectual Property Y Y Y Y Competitive 

Advantage

Patents And Y Y Y Y Competitive 

Copyright Advantage

Franchise agreements Y Y N Y Temporary competitive

advantage
Marketing rights Y Y N Y Temporary
competitive advantage
HRM skills Y Y Y Y Competitive Advantage
Main Strengths In Internal Environment
 Positive cash flow
 Effective branding and marketing
 Minimal staff turnover
 Extensive range of products and services
 Extensive distribution network
 Constant engagement with customers
 Sustainability
Main Weaknesses In Internal Environment
 Limited global presence
 False advertising
 Critics
 Controversial claims
SWOT Analysis of ASDA
Strengths • ASDA is a widely known and
established retail industry
organized in the UK.
• Provides customers with different
range of products and services
such as groceries, electronics,
cafe, petrol filing stations.

• Large distribution network.

• Promotes sustainability

Weaknesses • Limited international presence

• It has been reported that the

company is in debts of about £3.5
billlion (Rojas, 2021). This can affect
the financial stability.
SWOT Analysis (Continued)

Opportunities • Expand across the globe.

• Increase online presence

Threats • Competition with other companies in

the same industry. Such as Tesco,
Sainsburys, Waitrose, just to
mention a few.

• Losses from theft.

• Economic crises.
Is the Strategy consistent with the External Environment and
the resources and the competences of the company?

• ASDA Strategies:- Low-cost leadership, Customer services, Focus on

quality

• ASDA give points to their customer on shopping which they use on

getting discounts on their next purchase.

• ASDA is pressurizing its employees to work with the company for the
minimum wage and those who are not complying are getting fired.

• ASDA needs to adapt to external factors to maintain its market

position and meet customer expectations.
Resources:
 Tangible: Physical Stores, Warehouses and distribution centers, Supply chain
assets, Private label products, etc.
 Intangible: Brand equity, Intellectual property, Customer loyalty, Supplier
and partner relationship, etc.

Core competences:
 Strong supplier relationship
 Extensive store network
 Operational efficiency
Conclusion:

 The macro and micro environments seems to be in favor of ASDA for the
most part but for consistent success and in pursuit of market dominance
it must strive to mitigate external threats that it faces and to double
down on the available opportunities.
References

 Asda.com - Online Food Shopping, George, & more. (2023).

https://www.asda.com/about
 Bhilwarawala, M. (2023). Asda Stores Ltd. SWOT & PESTLE Analysis. SWOT &
PESTLE.com. https://www.swotandpestle.com/asda-stores-ltd/
 Climate Change Committee (2008). A legal duty to act. [online] Climate
Change Committee. Available at: ttps
://www.theccc.org.uk/what-is-climate-change/a-legal-duty-to-act/.
Corporate - ASDA. (n.d.). Asda to create 10,000 new jobs in convenience
store rollout. [online] Available at:
https://corporate.asda.com/newsroom/2022/12/06/asda-to-create-10-000-n
ew-jobs-in-convenience-store-rollout
.
 ‌ owell, A., Francis-Devine, B. and Foley, N. (2020). Youth unemployment
P
statistics. commonslibrary.parliament.uk. [online] Available at:
https://commonslibrary.parliament.uk/research-briefings/sn05871/.
 skbthemes and Rahman, M. (2020). Competitors of ASDA (ASDA Competitor
analysis). [online] howandwhat.net. Available at:
https://www.howandwhat.net/competitors-asda-asda-competitor-analysis/.
 Statista (2022). Retail Sales Value in Great Britain 2005-2021 | Statista.
[online] Statista. Available at
:https://www.statista.com/statistics/287912/retail-total-annual-sales-value-
great-britain/.
 Sodry, S. (2023). PESTEL analysis of ASDA. www.howandwhat.net.
https://www.howandwhat.net/pestel-analysis-of-asda/